Washington (CNN) - Republican presidential hopeful Herman Cain defended his "9-9-9" tax reform plan Sunday, saying the plan is fair and would not cause people with limited financial resources to pay more in taxes than they do currently.

Cain's proposal to do away with the current tax code in favor of a 9% corporate tax rate, 9% individual tax rate, and new 9% national sales tax has become the policy centerpiece of his increasingly popular 2012 White House bid.
On CNN's "State of the Union," Cain said the argument that the plan is not revenue-neutral was based on faulty analysis.

“The people who are saying it will not be revenue-neutral? They are absolutely wrong because they did a static analysis,” Cain said. “We had this done with the dynamic analysis with an outside independent firm so they are making an erroneous assumption.”

Cain also pushed back on the suggestion the plan is regressive because it proposes taxing the rich at the same rate as middle and lower-class people.

“Relative to regression, no, it is not,” Cain said. “If you take a family of four at $50,000, and $25,000, start with the fact that if they're getting a paycheck, they pay 15.3% in the payroll tax. That 15.3 becomes 9 percent. That's a 6 percentage point differential.”

Cain explained that the proposed 9% national sales tax would only be applied to new goods that change hands and not to the sale of used goods. Asked on CBS’ “Face the Nation” what the impact of that would be on the auto industry, Cain said it would lead to the depletion of the existing inventory of used cars. "And, eventually, people are going to start buying new cars. So that's not a big negative," Cain said.

Cain also insisted that, notwithstanding the new additional 9% national sales tax, the poor would not pay more in taxes. Cain reasoned that the lower individual income rate of 9% under his proposal would save lower-wage taxpayers money relative to the amount of payroll taxes they currently pay. Specifically, because of the differential between the current 15.3% payroll tax rate and his proposed 9% flat individual income tax rate, Cain said "9-9-9" would generate savings on individual income taxes for all taxpayers.

“That 6 percentage point difference makes up for a lot of the sales tax that people will have to pay,” Cain said on CNN.

When asked by CNN’s Candy Crowley if he thought the plan is fair, Cain pointed out that under his plan, used goods would not be taxed.

“Yes, it does sound fair, because of the other point that I'm about to make,” Cain said. “If they need to buy a car or a home or some hard goods that are used, they pay no taxes. So they have an opportunity for them to leverage their income.”

In a segment on CNN's "John King, USA" on Wednesday, the specific revenue proposals in Cain's plan were compared with the current tax structure. King showed a significant gap in revenue between Cain's plan, which would bring in $1.768 trillion in revenue, and the current tax structure, which brings in about $2.16 trillion.

soundoff(24 Responses)

logic in LA

The poor will pay more. first they will pay 9% of their income. then on top of the 9% federal sales tax, the state, county and city sales taxes will mean some people will pay as high as 20% sales tax on goods. So the 15,000.00 income will drop to 13,650.00 before state taxes and the 30.00 jeans will actually cost them 36.00. While this will not affect the wealthy, it will cost the poor and even the middle class more to live. the other facotr is, most people in the higher tax brackets don;t have families to support. They are either older and therefore the kids have moved or are childless because they have chosen career over family.
There is nothing wrong with that except it puts an unfair disadvantage on the middle class and poor.

October 9, 2011 02:35 pm at 2:35 pm |

D bach

this guy needs to check his math again. I make 135k, my affective tax rate with deductions is 10.4%. If I pay an additional 9% my tax rate would be 18%. looks like a tax increase to me.

October 9, 2011 02:42 pm at 2:42 pm |

Four and The Door

Excellent plan! Finally someone stepping forward to fix the federal tax mess. It is extremely fair, extremely simple and easy to implement. Our current tax code works against economic growth and debt management. It is being used as a tool by Democrats to incite class warfare. 9-9-9 makes these problems go away. Stop complaining and start solving. I like Herman Cain's approach.

October 9, 2011 02:45 pm at 2:45 pm |

midwestmoderate

"Yes, it's fair. Yes," the former executive responded, "because you give poor people more opportunity to stretch their dollar and leverage their income based up their decision whether to buy new or used goods."

So basically he is telling poor people that you don't deserve to be able to buy new merchandise and should therefore buy second hand items from goodwill and salvation army stores as to not have to pay a 9% sales tax. And THIS isn't class warfare on the poor and middle class??? give me a break...

October 9, 2011 02:57 pm at 2:57 pm |

Victoria avgam54

I can't speak for the poor but I am middle class self employed and a job creator. Under 999 my tax deductions would be gone and I don't know any middle class person in my situation on a 1099 who could stay in business without our deductions for biz expenses. His plan stinks.

October 9, 2011 02:58 pm at 2:58 pm |

openyurmind

Honestly, Herman Cain is CEO of Godfathers' Pizza. Do I need to say anymore? His strategy I guarantee is to make the working class of American's a cheap labor force that way they pay less in taxes and make less in income. Yet with the lowered income that leaves more money in the hands of the higher ups (Gov.). Which is all a scam, in my opinion how about you Herman Cain come back after you diversify your knowledge in business, a successful pizza company doesn't cut it. What if Col. Sanders ran for president in his prime?

October 9, 2011 03:01 pm at 3:01 pm |

Greta McCaughrin

Who loses by 9-9-9? Seniors living on pensions or on social security. They now have to pay additional 9% sales tax on everything new - like food? Buy used food? Used medicines?
A single parent making 30K with two children. She loses $3,000 in earned income and child credit. If she earns 20K, she loses over $6,000.
Who wins? A millionaire. Instead of paying $314,000 in taxes, he pays $90,000 – on top of not paying payroll tax.
The economy will fold, because no one will be buying anything new (except the top 1%).

October 9, 2011 03:05 pm at 3:05 pm |

Sandy

Caine is an idiot and can't do math. It would absolutely hurt the poor more.

October 9, 2011 03:07 pm at 3:07 pm |

Richard Hoffman

The unempoyed andthose on afixedincome would get no help from apayroll tax elimination. Thus 999 is aregsive plan.

October 9, 2011 03:14 pm at 3:14 pm |

Ray

More like 6 6 6 on the poor

October 9, 2011 03:16 pm at 3:16 pm |

Henry Miller, Libertarian

But the "poor" ought to have to pay more!

Under the present system, "the poor" can vote for politicians who promise ever more entitlements, secure in the knowledge that they themselves won't have to pay for any of them. There is nothing built into that system to limit how much "the poor" demand the rest of us pay for, which has very directly led to the situation where "the poor" pay nothing in federal taxes but are the beneficiaries of the biggest federal expenditures. How is this even remotely fair to those who are forced to pay the taxes?

It should hurt to vote to spend other peoples' money.

October 9, 2011 03:30 pm at 3:30 pm |

Mike Dallas

I am going with John King's analysis, what's his face's math skills are woefully inadequate.

I wouldn't want him at the register making change when I paid for my pizza.

October 9, 2011 03:33 pm at 3:33 pm |

Tony

Yeah, sure. When you lower the corporate tax rate, and lower the tax rates for the upper and middle class, where else is revenue coming from? The working class and the poor. Dynamic analysis? Cain's plan is just voodoo economics with a different name.

Republicans should stop accusing Democrats of class warfare, unless they stop their war against the poor.

October 9, 2011 03:50 pm at 3:50 pm |

Rudy NYC

President Obama said it is a simple matter of math. Mr. Cain thinks that means it is all about the business and the bottom line when the President was talking about the human equation of fairness.

October 9, 2011 03:51 pm at 3:51 pm |

Rhonda

So in other words what they would save in payroll taxes they would have to pay in sales taxes. One more thing about that there sales tax. That's federal ok what happens to that tax when the individual states slap on there sales tax on top of that? No one is saving anything it's just getting shifted around. With a possibility of getting continually increased when the state you live in needs more money.So that 15.3% income tax just became 15.3% sales tax. Hmm good idea or bad?

October 9, 2011 03:52 pm at 3:52 pm |

Danny Aston

Cain ignored the added burden upon the bracket who pay 10 percent income tax and wont have such an offset as to be able to afford basic necessities. Also his entire plan hinges upon a great economic turnaround to magically appear for he has no ideas of hisown which would create the increase of productivity required to generate the current level of revenue when/if his plan takes effect.

October 9, 2011 03:56 pm at 3:56 pm |

vic , nashville ,tn

9-9-9 good marketing strategy republicans are buying that

October 9, 2011 03:57 pm at 3:57 pm |

Alex

The Bushes had vodoo economics. Didn't work then. Cain has pizza economics. Won't work now.

October 9, 2011 04:26 pm at 4:26 pm |

Rudy NYC

If you would like to fact check Mr. Cain's misleading claims, read IRS Publication E "Circular E" Employers Tax Guide that is used to determine withholding taxes. Mr. Cain cites figures for the middle class, when the criticism is for the poor, those making under 20k per year. Their federal taxes would increase from zero to double or more.

October 9, 2011 04:27 pm at 4:27 pm |

Drew

More VooDoo economics Herman. What about the embedded tax, gas tax, property tax, and a host of other taxes we pay 9-9-9 does not do away with all of the bad dreams.

October 9, 2011 04:36 pm at 4:36 pm |

Drew

Herman does suggest the FairTax which seems like a great plan. If you don't know about FairTax google it and read it.

October 9, 2011 04:39 pm at 4:39 pm |

Four and The Door

The 9-9-9 tax proposal is better for everyone. Everyone pays the same rate but if you make more and spend more you pay more. All of those tax loopholes go away. No special favors for special interests. Of course Obama would hate it.

October 9, 2011 04:42 pm at 4:42 pm |

Daniel

Herman Cain called us poor people 'bottom feeders'. Herman should stay out of politics, and concentrate on what he does best: PIZZA!! And his 9-9-9 scares me. 9-9-9 is 6-6-6, in disguise.

October 9, 2011 04:56 pm at 4:56 pm |

Wojtek

Poor people spend most of their money on food,gas and electricity bills. According this plan ,they will be forced to buy "used" bananas, "recycled" gas and "old" electric power. Other thing – because will be no tax on used goods(like cars),sellers automatically will raise praise on them. It still will be chipper,but not like now.